Everyone has been focusing on the wave of corona virus cases. We have had a wave, but it is a fraction of what was predicted. There have been 775,846 cases in the U.S. That sounds like a lot until you realize that in the 2018-2019 flu season 42.5 million people got sick, 647,000 were hospitalized and 61,200 people died. By the way, that was lower than the CDC estimate of 48.8 million people getting sick, 959,000 hospitalizations and 79,400 deaths.
No one proposed shutting down the entire U.S. economy to stop the spread of the flu. This year the CDC was estimating that COVID 19 would cause 2.6 million deaths and our entire health care system would be overwhelmed. Things were so dire that emergency hospitals were built and hospital ships were dispatched to New York and Los Angeles. Some will argue that shutting down the economy really worked. Perhaps that is true, but at what cost? We are about to find out.
The wave of COVID 19 cases never developed, other than in New York. Even then, it really wasn’t a big wave. That wave may also be overstated. I checked on New York and guess what. Last year on week 14 New York got 4,522 new flu cases. This year, on week 14 New York got 193 new flu cases. The pattern is the same for 2016-17, 2017-18 and 2018-19. The big change is that in 2020, flu apparently just went away on vacation. Or perhaps this explains why the sudden bump in COVID 19 cases.
In any event, the big wave that was going to overwhelm our hospitals never happened. But the economic wave from shutting down our economy is all too real and this is a whopper. It is estimated that 22 million people are suddenly out of work. Some small businesses, like restaurants have shut down completely. Other businesses are operating with minimal staff. People aren’t buying cars, they aren’t buying homes, and they aren’t spending money on entertainment. They are sitting home. This is bad enough for those sitting home, suffering from boredom. But it is catastrophic for small business owners. Some, perhaps many, of them will never recover. It is beyond catastrophic for hourly workers who have lost their job and may be unemployed for months.
The American Property & Casualty Insurance Association estimates that: “closure losses for just businesses with 100 or fewer employee is running $255 to $431 billion per month. Bet on the higher number being closer to reality. They estimate this is 43 to 72 times the monthly commercial property insurance. This means a lot of small businesses will not have insurance coverage for this, yet the cost is so high that everyone will pay higher insurance premiums in the future.
This wave, just off shore, has not hit yet but it is coming now and moving fast. We are just now at the point where people are without a paycheck, perhaps waiting for an unemployment check. That will help, but unemployment is not a substitute for a job and some people aren’t being paid at all. The stimulus checks being sent out to help haven’t arrived yet and when they do everyone knows there will be no more checks coming. When those checks arrive, a lot of smart people will put them in savings to prepare for the economic storm on the way.
The result will be immediate and devastating. Retail sales will plummet. People will stop paying rent. Landlords will be legally prohibited from evicting them. If you think we have a housing crisis now, wait a couple of months. People will stop paying mortgages. Those affected will delay payments for things like insurance, but at some point they will still have to pay. Odds are many of them won’t be able to pay in the future either.
If you think the COVID 19 virus changed things overnight, you will be stunned at how different things look next week at this time. We won’t even recognize our country by the end of the month.
During the great depression, American turned to a socialist President who sold people on the idea that only big government could fix things. This time, it will be increasingly obvious that it was government mismanagement that caused this. While everyone was terrified by the virus, they were oblivious to the real danger from a government ordered economic meltdown. The government doesn’t have nearly enough money to fix the problems it caused. Raising taxes is not an option. Talk about killing the Golden Goose.
The blame game is just around the corner and it will be beyond vicious. Right now, everyone is pointing fingers at Trump for moving too slow. That sounded great, until it becomes obvious that moving slow does a lot less damage than reckless abandonment of logic and common sense. It wasn’t Trump who ordered the shutdown of the country that was the governors. Those who consider themselves to be most wise will soon look like the biggest fools.
We are going to see a nationwide revolt, against irresponsible government. It is already starting and it is going to dominate everything. During times like this, it is impossible to predict results. In Germany, this kind of crisis created an environment where Adolph Hitler was able to take power. The only thing certain is change, significant dramatic change that will last for decades. My guess is that the guy to stands tall, every day, fighting against his opponents in the media will be the person people choose to lead our way out of this.
But, history teaches us another lesson. That those least worthy of power are most likely to seize it illegally. Democrats have already tried this by trying to include vote by mail in any stimulus package just in time for the 2020 election. All that is required for evil to win is for good people to do nothing. You’ve been warned.